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2021 (5) TMI 164 - HC - Service TaxRate of interest on delayed payment of service tax - at what rate petitioner is liable to pay interest i.e. 15% or 24%? - HELD THAT:- Admittedly, the petitioner firm started its service after completing registration formalities in July, 2011 and the respondents have calculated the interest liability from the first quarter of Financial Year 2011-12. If the petitioner firm has started its services in July 2011, there cannot be any demand for the first quarter of 2011-12. As per the contention of respondents, petitioner made delayed payment of service tax between August, 2016 and February, 2017, i.e. the time when aforesaid notification was in force i.e. 14.05.2016. The notification fixed the rate of simple interest @ 24% in case where any amount is specifically collected as service tax and still not deposited with the Central Government on or before the date on which such payment became due whereas rate of 15% is fixed for any other situation - In the case in hand, it is the specific stand of petitioner that it did not specifically collect the tax from the service recipients. The respondents have quantified interest 24% per annum on the basis of Notification dated 01.03.2016 presuming that the petitioner has specifically collected some amount as service tax and still not deposited with Central Government, whereas the petitioner, in the invoices issued during the period in question did not collect any amount specifically mentioning it as service tax. The grant of benefit of cum-tax value in M/S BALAJI MANPOWER SERVICES, FARIDABAD VERSUS UNION OF INDIA AND ORS [2019 (10) TMI 540 - PUNJAB AND HARYANA HIGH COURT], further supports the case of the petitioner. The action of the respondents to charge interest @ 24% in accordance with Notification dated 01.03.2016 is arbitrary and not sustainable in the eyes of law - the impugned order modified to the extent of charging interest @ 15% - petition allowed in part.
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